Operating rate down 0.42% MoM; Electric furnace mills to gradually enter annual maintenance wave

According to the SMM survey, the operating rate of 50 construction steel-focused electric furnace steel mills nationwide was 42.4%, down 0.42% MoM; the capacity utilization rate was 43.24%, down 0.49% MoM; the daily average production of construction steel was 96,300 mt, down 1,100 mt MoM.

During the survey period (January 13–January 20), affected by factors such as cost pressure and falling steel prices, the profitability of electric furnace mills nationwide declined to varying degrees this week. However, to ensure order fulfillment and maintain market share, most electric furnace mills chose to maintain previous operating levels. Nevertheless, one electric furnace mill in east China, due to extended prior operation, implemented minor production cuts this week to adjust its production status; another electric furnace mill temporarily halted production due to equipment maintenance.

Looking ahead, as the Chinese New Year holiday approaches, downstream demand is entering the off-season, and electric furnace mills will successively commence pre-holiday maintenance and annual equipment upkeep. It is reported that individual electric furnace mills plan to halt operations around the month-end, while most enterprises will concentrate shutdowns around the Little New Year. Consequently, the operating rate of electric furnaces is expected to continue its downward trend.